London midday: Stocks maintain gains as housebuilders rally

by | Dec 21, 2021

London stocks were still firmly in the black by midday on Tuesday, recovering from heavy losses in the previous session after the government held off from introducing further Covid restrictions.

The FTSE 100 was up 0.9% at 7,264.31, having fallen 1% on Monday amid worries about the spread of Omicron and the potential for further restrictions.

Russ Mould, investment director at AJ Bell, said: “As we head towards an uncertain festive break the market is swaying about more than someone who’s over-indulged on the sherries on Christmas Day.

“That’s unsurprising as investors still awaiting a full picture on just how disruptive Omicron is going to be – with UK Prime Minister Boris Johnson putting off any decision on further restrictions for now.

“There’s certainly already been signs of a sizeable hit to retail, hospitality and travel businesses as people enter self-imposed lockdowns to avoid having to isolate over Christmas.

“The slight improvement in the public finances revealed today may give the Chancellor Rishi Sunak scope to be more Santa than Scrooge in providing support to these industries during this challenging period.

“Added to the mix is Democratic Senator Joe Manchin’s decision not to support President Biden’s Build Back Better infrastructure bill, throwing a spanner in the works of a key plank of the administration’s policy programme and hitting the share prices of industrial businesses, both here and in the US, which would have expected to benefit from the $1.9 trillion of spending.

“Time will tell if this is a negotiating strategy from Manchin or if he really intends to blow up the legislation entirely.”

On the macro front, figures released earlier by the Office for National Statistics showed public borrowing fell in November as spending on the pandemic eased and the furlough scheme came to an end, but was still the second-highest figure for the month since records began in 1993.

Public sector net borrowing fell by £4.9bn from November last year to £17.4bn. However, this was higher than the £16bn expected by analysts and above the Office for Budget Responsibility’s forecast of £14.2bn.

The decline on the year was largely down to the fact that most of the country was in lockdown last year.

Elsewhere, a survey from the Confederation of British Industry showed retail sales growth slowed sharply in the year to December as concerns about the Omicron variant kept shoppers away from high streets.

The CBI’s monthly retail sales balance slid to +8 from +39 in November, with sales expected to grow at a similar pace next month.

CBI lead economist Ben Jones said: “Omicron’s chilling impact on activity on the High Street, with retail sales growth slowing and expectations for the coming month sharply downgraded.

“On the supply side, retailers have been making progress in building up stocks, which were seen as more than adequate to deal with expected demand over Christmas. The concern now is the potential for rapidly rising sickness and staff absences to cause renewed disruption to supply chains in the New Year.

“It’s crucial that the Government takes steps to help society live confidently with the virus, including meaningful dialogue between business, government and unions to assess the impact of restrictions and the need for future support.”

In equity markets, JD Sports was the standout gainer on the FTSE 100 after Nike’s second-quarter earnings and sales beat expectations overnight.

Housebuilders were on the rise, with Barratt, Taylor Wimpey, and Persimmon all higher after data from HMRC showed house sales rebounded in November.

Miners also gained as metals prices advanced, with Rio, Anglo American and BHP higher.

Asset manager Schroders rose after it agreed to buy a 75% stake in specialist investment manager Greencoat Capital Holdings for an initial £358.0m.

Market Movers

FTSE 100 (UKX) 7,264.31 0.92%
FTSE 250 (MCX) 22,824.44 1.22%
techMARK (TASX) 4,469.54 0.93%

FTSE 100 – Risers

JD Sports Fashion (JD.) 205.80p 3.31%
Informa (INF) 490.80p 3.24%
Barratt Developments (BDEV) 724.80p 3.10%
Taylor Wimpey (TW.) 169.00p 3.05%
Abrdn (ABDN) 233.30p 2.96%
Berkeley Group Holdings (The) (BKG) 4,776.00p 2.91%
Rio Tinto (RIO) 4,897.50p 2.90%
Persimmon (PSN) 2,771.00p 2.86%
Associated British Foods (ABF) 1,965.50p 2.80%
Smith & Nephew (SN.) 1,241.50p 2.43%

FTSE 100 – Fallers

Dechra Pharmaceuticals (DPH) 5,000.00p -1.77%
Auto Trader Group (AUTO) 713.60p -0.89%
Unilever (ULVR) 3,950.00p -0.79%
Ocado Group (OCDO) 1,673.00p -0.54%
Sainsbury (J) (SBRY) 271.90p -0.29%
Croda International (CRDA) 9,974.00p -0.26%
Diageo (DGE) 3,974.50p -0.24%
Bunzl (BNZL) 2,857.00p -0.21%
Royal Mail (RMG) 502.80p -0.16%
Sage Group (SGE) 822.20p -0.12%

FTSE 250 – Risers

Aston Martin Lagonda Global Holdings (AML) 1,296.50p 5.19%
Reach (RCH) 268.50p 5.09%
Darktrace (DARK) 418.20p 4.39%
Countryside Properties (CSP) 444.60p 4.12%
Network International Holdings (NETW) 277.00p 4.02%
Just Group (JUST) 79.00p 4.02%
Vistry Group (VTY) 1,150.50p 3.70%
Micro Focus International (MCRO) 375.30p 3.67%
Crest Nicholson Holdings (CRST) 356.80p 3.60%
TUI AG Reg Shs (DI) (TUI) 221.90p 3.59%

FTSE 250 – Fallers

Telecom Plus (TEP) 1,560.00p -0.89%
Playtech (PTEC) 740.00p -0.74%
Premier Foods (PFD) 108.00p -0.74%
Watches of Switzerland Group (WOSG) 1,370.00p -0.72%
FirstGroup (FGP) 102.50p -0.68%
Essentra (ESNT) 319.50p -0.62%
Kainos Group (KNOS) 1,765.00p -0.51%
Pennon Group (PNN) 1,185.00p -0.42%
Diploma (DPLM) 3,278.00p -0.36%
Tritax Eurobox (GBP) (EBOX) 115.40p -0.35%

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